Start early, set aside funds on a regular basis
That’s easy to say and it’s good advice, but for many young people, early in their careers, it is not really a priority. When it does become a priority, as it inevitably will, it may have been left rather too late, but as they say, better late than never.
And the retiree may have a family and other responsibilities that require a continue income stream. So many of us who are now retired have found out that we should have made better plans to take care of ourselves, the government’s Social Security is not enough to provide all of the comforts we have become accustomed to and we have had to make serious adjustments in our retirement years.
When getting closer to retirement, nearly everyone worries about having enough money to do so. Some people are lucky enough to be among the few that enjoy the safety of a pension, however, that is not always the case. Today, more than ever, you must be prepared to take your retirement planning into your own hands and make provisions for yourself and your spouse. It may not be a simple task and it helps if you have the right foundation of knowledge or know where to go and who to consult to obtain the necessary advice.
There is a need to set financial objectives, to decide what methods to use to achieve them, and to make a master plan to be followed, This might be best done with the aid of a professional financial planner who is familiar with a wider range of possibilities to achieve the established objectives.
Do this and you will be well on your way to a successful retirement. But do not just totally rely on anyone without being fully informed yourself on what actions are being taken. You need to be familiar enough on matters to be able to make your own judgments on the value and credibility of any advice you receive and commitments you are making.
Objectives for retirement
The first step is to determine your goals for retirement and then determine your income needs in retirement. Many people think they will need less money to for living after they retire, but the fact is that most people tend to spend more with their new found abundance of time. Try to project your expenses in retirement.
To gain some idea of what the costs of retirement might be in the future, there are some internet resources which have calculators that can help determine the amount of money that needs to be saved each month to reach the set objective when the time arrives.
What methods to use to meet the objectives
The next step is to determine what the best investment methods to use. Deferred tax plans such as 401k and investment retirement accounts, IRA’s, can be very good if available from your company, especially if the company contributes matching funds.
If your company does not offer a retirement plan then you may want to turn to an IRA or a Roth IRA. Most investment companies make it very easy to open an IRA and will give you sample portfolios that can be matched with your age.
Once you have your plan in place remember to stick to it. Markets go up and down, however, overall the long-term trend is up. In any long stretch of time there will be periods when stock markets fall so there is a need to be prepared for that eventuality and a firm plan of what to do should a significant market downturn occur while you have money invested in the stock market.
Even professionals in finance and accounting lose money in those times so you need to be personally paying attention and ready to act should things get drastic. You may have to cut your losses but you also need to know when and how best to do so. When markets fall, don’t panic but be ready with a plan to act in defense of your savings. So many in the past have lost so much through waiting it out or waiting too long.
If you have the expertise or have access to the right advice, market collapses can be viewed as great buying and selling opportunities. That takes a lot of “know-how” but many fortunes have been made in such cases.
Many people do not consider retirement until it is drawing near. If you start investing at a young age you should have more than enough to retire on and it will require smaller amounts in the beginning when you are young. Money invested will have a longer period to compound.
Set you objectives, determine which investing vehicles and methods are right for you, and stick to the plan you have formulated.
Do all of that and you can rest more easily with the reassuring knowledge that you can enjoy a fruitful retirement when the time arrives.